Business Expense Deduction - Initial Review Guide

Is the trade or business located within the Economic
Development Area? Is the trade or business "conducting business"
within the Economic Development Area? [See the Economic Development
Area Manual (EDAM) for Economic Development areas and code references.]

Check
the business address on the California Technology, Trade and Commerce Website.
If the business operates in multiple locations, check for an apportionment factor.

The
return address may be where records are kept, and may not be where the business
is being "conducted."

Does the balance sheet reflect
an increase in the fixed asset accounts, taking into account reported dispositions
of assets?

Compare the amount of qualified property with the amount
of property purchased for the tax year. Figure the amount of property purchased
for the year by looking at the depreciation schedule, which should include a purchase
date. Look at Schedule L, line 9 for corporations (subtract the beginning balance
from the ending balance).

NOTE: See EDA
Manual for interaction with Manufacturer's Investment Credit.